Large employers are wary of megamergers that some of the country's largest health insurers are pursuing. 

Insurers have insisted that Aetna's proposed $37 billion purchase of Humana and Anthem's proposed $54 billion acquisition of Cigna will result in savings for consumers, including businesses desperate to slow down the rapidly increasing cost of covering employees. 

They argue that the muscle they gain from the mergers will allow them to negotiate lower prices with hospitals, physicians, specialists, and pharmaceutical companies that they can pass on to their policyholders. They have also pointed to an increasing consolidation of hospitals as evidence that payers need to similarly bulk up to negotiate lower prices.  

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Big businesses, however, are far from convinced that a less competitive insurance landscape will lead to lower prices. Businesses seeking insurance already have very limited insurance options in many areas of the country, and the mergers may in some instances eliminate the only choice in insurance that remains. 

It was that reasoning that led state regulators in Missouri to announce that, should the Aetna-Humana merger go through, the resulting company and any of its subsidiaries will not be allowed to participate in certain insurance markets in which their presence was judged so dominant as to be uncompetitive. 

"Anytime you have a limited market and limited number of key players and they come together, that's not a great thing for a purchaser," Larry Boress, CEO of the Midwest Business Group on Health, told Modern Healthcare. 

Boreas says that in a recent survey of his membership 95 percent said they viewed the mergers as a negative development for their business. 

Bill Kramer, who heads the Pacific Group on Health, also reports that member businesses did not expect mergers to bring lower costs or higher quality of service.

 

"I think larger employers are skeptical that will occur," he says. "We haven't seen any evidence that will be the case."

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